Jace is in the Siclent City because he "sassed" the Inquisitor. Even though this is not suprising once you get to know Jace, the Inquisitor thought that a night in the Scilent City jail cells, where they keep murderers and other criminals waiting for trail, so that he can have time to himself so that he can realize what he said wrong to the Inquisitor. It was like a Shadowhunter time-out